BRICS is the acronym for an association of five major emerging national economies: Brazil, Russia, India, China, and South Africa.[2] The grouping was originally known as "BRIC" before the inclusion of South Africa in 2010. The BRICS members are all developing or newly industrialised countries, but they are distinguished by their large, fast-growing economies and significant influence on regional and global affairs; all five are G-20 members.[3]

As of 2014, the five BRICS countries represent almost 3 billion people which is 40% of the world population, with a combined nominal GDP of US$16.039 trillion (20% world GDP) and an estimated US$4 trillion in combined foreign reserves.[1][4] As of 2014, the BRICS nations represented 18 percent of the world economy.[5]

The BRICS have received both praise and criticism from numerous quarters.[6][7][8] The term, "BRICS", was coined by economist Jim O'Neill in his publication, Building Better Global Economic BRICs.[9]

Contents

History1

First BRIC summit1.1

Entry of South Africa1.2

Developments1.3

Summits2

Member countries3

Potential members3.1

Criticism4

Current BRICS leaders5

See also6

References7

Books and Further reading7.1

External links8

History

The foreign ministers of the initial four BRIC states (Brazil, Russia, India, and China) met in New York City in September 2006, beginning a series of high-level meetings. A full-scale diplomatic meeting was held in Yekaterinburg, Russia, on 16.6.2009.[10]

In the aftermath of the Yekaterinburg summit, the BRIC nations announced the need for a new global reserve currency, which would have to be "diversified, stable and predictable".[13] Although the statement that was released did not directly criticise the perceived "dominance" of the US dollar – something that Russia had criticised in the past – it did spark a fall in the value of the dollar against other major currencies.[14]

Entry of South Africa

In 2010, South Africa began efforts to join the BRIC grouping, and the process for its formal admission began in August of that year.[15] South Africa officially became a member nation on 24 December 2010, after being formally invited by the BRIC countries to join the group.[15] The group was renamed BRICS – with the "S" standing for South Africa – to reflect the group's expanded membership.[16] In April 2011, the President of South Africa, Jacob Zuma, attended the 2011 BRICS summit in Sanya, China, as a full member.[17][18][19]

Developments

The BRICS Forum, an independent international organisation encouraging commercial, political and cultural cooperation between the BRICS nations, was formed in 2011.[20] In June 2012, the BRICS nations pledged $75 billion to boost the lending power of the International Monetary Fund (IMF). However, this loan was conditional on IMF voting reforms.[21] In late March 2013, during the fifth BRICS summit in Durban, South Africa, the member countries agreed to create a global financial institution which they intended to rival the western-dominated IMF and World Bank.[22] After the summit, the BRICS stated that they planned to finalise the arrangements for this New Development Bank by 2014.[23] However, disputes relating to burden sharing and location have slowed down the agreements.

At the BRICS leaders meeting in St. Petersburg in September 2013, China committed $41 billion towards the pool; Brazil, India and Russia $18 billion each; and South Africa $5 billion. China, holder of the world's largest foreign exchange reserves and who is to contribute the bulk of the currency pool, wants a greater managing role, said one BRICS official. China also wants to be the location of the reserve. "Brazil and India want the initial capital to be shared equally. We know that China wants more," said a Brazilian official. "However, we are still negotiating, there are no tensions arising yet."[24] On 11th October 2013, Russia's Finance Minister Anton Siluanov said that a decision on creating a $100 billion fund designated to steady currency markets would be taken in early 2014. The Brazilian finance minister, Guido Mantega stated that the fund would be created by March 2014.[25] However, by April 2014, the currency reserve pool and development bank had yet to be set up, and the date was rescheduled to 2015.[26] One driver for the BRICS development bank is that the existing institutions primarily benefit extra-BRICS corporations, and the political significance is notable because it allows BRICS member states "to promote their interests abroad... and can highlight the strengthening positions of countries whose opinion is frequently ignored by their developed American and European colleagues."

In March 2014, at a meeting on the margins of the Nuclear Security Summit in The Hague, the BRICS Foreign Ministers issued a communique that "noted with concern, the recent media statement on the forthcoming G20 Summit to be held in Brisbane in November 2014. The custodianship of the G20 belongs to all Member States equally and no one Member State can unilaterally determine its nature and character." In light of the tensions surrounding the 2014 Crimean crisis, the Ministers remarked that "The escalation of hostile language, sanctions and counter-sanctions, and force does not contribute to a sustainable and peaceful solution, according to international law, including the principles and purposes of the United Nations Charter."[27] This was in response to the statement of Australian Foreign Minister Julie Bishop, who had said earlier that Putin might be barred from attending the G20 Summit in Brisbane.[28]

In July 2014, the Governor of the Russian Central Bank, Elvira Nabiullina, claimed that the "BRICS partners the establishment of a system of multilateral swaps that will allow to transfer resources to one or another country, if needed" in an article which concluded that "If the current trend continues, soon the dollar will be abandoned by most of the significant global economies and it will be kicked out of the global trade finance."[29]

Over the weekend of 13 July 2014 when the final game of the World Cup was held, and in advance of the BRICS Fortaleza summit, Putin met his homologue Dilma Rouseff to discuss the BRICS development bank, and sign some other bilateral accords on air defense, gas and education. Rouseff said that the BRICS countries "are among the largest in the world and cannot content themselves in the middle of the 21st century with any kind of dependency."[30] The Fortaleza summit was followed by a BRICS meeting with the UNASUR presidents in Brasilia, where the development bank and the monetary fund were introduced.[5] The development bank will have capital of US$50 billion with each country contributing US$10 billion, while the monetary fund will have US$100 billion at its disposal.[5]

On 15 July, the first day of the BRICS 6th summit in Fortaleza, Brazil, the group of emerging economies signed the long-anticipated document to create the US$100 billion BRICS Development Bank and a reserve currency pool worth over another US$100 billion. Documents on cooperation between BRICS export credit agencies and an agreement of cooperation on innovation were also inked.[31]

Summits

The grouping has held annual summits since 2009, with member countries taking turns to host. Prior to South Africa's admission, two BRIC summits were held, in 2009 and 2010. The first five-member BRICS summit was held in 2011. The most recent BRICS summit took place in Fortaleza, Brazil, from 14 to 16 July 2014.[32]

Criticism

In 2012, Hu Jintao, who at the time was President of China, described the BRICS countries as defenders and promoters of developing countries and a force for world peace.[6] Some analysts have highlighted potential divisions and weaknesses in the grouping, including significant economic instabilities,[41][42][43][44] disagreements between the members over UN Security Council reform,[45] and India and China's disputes over territorial issues.[7]

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